Good day, and thank you for standing by. Welcome to the Fourth Quarter and Fiscal year 2021 Cavco Industries, Inc. Earnings Call Webcast. [Operator Instructions]. I would now like to turn the conference over to your host, Mr. Mark Fusler, Director of Financial Reporting and Investor Relations. Please go ahead..

Good day, and thank you for joining us for Capital Industries Fourth Quarter and Fiscal Year 2021 Earnings Conference Call. During this call, you'll be hearing from Bill Boor, President and Chief Executive Officer; Paul Bigbee, Chief Accounting Officer; and myself.

Before we begin, we'd like to remind you that comments made during this conference call by management may contain forward-looking statements under the provisions of the Private Securities Litigation Reform Act of 1995, including statements of expectations or assumptions about Cavco's financial and operational performance, revenues, earnings per share, cash flow or use, cost savings, operational efficiencies, current or future volatility in the credit markets or future market conditions.

All forward-looking statements involve risks and uncertainties, which could affect Cavco's actual results and could cause its actual results to differ materially from those expressed in any forward-looking statements made by or on behalf of Cavco.

I encourage you to review Cavco's filings with the Securities and Exchange Commission, including, without limitation, the company's most recent forms, 10-K and 10-Q, which identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements.

Some factors that may affect Cavco's results include, but are not limited to, the impact of local or national emergencies, including the COVID-19 pandemic, and such impacts from state and federal regulatory action that restricts our ability to operate our business in the ordinary course and the impact on customer demand and the availability of financing for our products; our supply chain and the availability of raw materials for the manufacture of our products; the availability of labor and the health and safety of our workforce; our liquidity and access to the capital markets; the risk of litigation or regulatory action; potential reputational damage that Cavco may suffer as a result of matters under inquiry; adverse industry conditions; our involvement in vertically integrated lines of business, including manufactured housing, consumer finance, commercial finance and insurance; market forces and housing demand fluctuations; our business and operations being concentrated in certain geographic regions; loss of any of our executive officers; additional federal government shutdowns and regulations affecting manufactured housing.

This conference call also contains time-sensitive information that is only accurate as of the date of this live broadcast, Thursday, May 27, 2021.

Cavco undertakes no obligation to revise or update any forward-looking statement, either written or oral, to reflect events or circumstances after the date of this conference call, except as required by law. Now I'd like to turn the call over to Bill Boor, President and Chief Executive Officer.

Bill?.

Welcome, and thank you for joining us today to review our results for the fourth quarter and fiscal year. Reflecting on the year, I went back to last year's call. By the time we reported in May of last year, we were starting to see some positive demand signs.

However, the magnitude of the pandemic was increasingly apparent, and it was an incredibly uncertain time. At Cavco, we are already well into the process of implementing policies and approaches to support our employees while safely keeping all of our operations open to support our customers.

Nobody could have guessed at what was ahead, and we said on the call that projections and predictions were meaningless. We set clear principles for the path forward, and we remain flexible. We now know that we were in the early stages of a long and very challenging year.

To be reporting our 11th straight year of increased revenue and operating earnings with that backdrop is remarkable. And it can only be attributed to the people at Cavco who have persevered and remained extremely committed.

That's true for the year and has been demonstrated again in the fourth quarter when the Texas freeze and power outages impacted people across all of our operations. Again, they found ways to quickly open backup even while dealing with their personal challenges due to the unprecedented weather event.

The business results speak for themselves, but were only possible through extraordinary and very capable effort. Focusing on a few of the results, we recorded the highest quarterly net revenue in our history. Our manufacturing utilization was approximately 75%.

While that's lower than before the pandemic and little constellation given the rapidly growing backlog, it's very good progress in light of persistent labor and supply challenges that have not let up. At times during the quarter, utilization did reach 80% despite significantly less hours worked and the supply inefficiencies we've discussed before.

Backlogs were up again this quarter, growing $131 million to $603 million. That equates to approximately 32 to 34 weeks. While we need to keep pushing to produce more than the extraordinary order rates that are driving those backlogs, order rates were up 50% over last year's fourth quarter and 40% for the year.

These incremental orders account for about 85% of the backlog growth this year. After a dip in forest product costs in October and November, which favorably impacted our fourth quarter margins, supply costs escalated rapidly. For example, orient strand board was up 275% over the past year and 48% from the start to the end of the fourth quarter.

As we've worked to increase inventories where possible to address supply risk, we expect a lag in our manufacturing margins, whereby cost of goods sold will continue to drift up even after spot markets hopefully peak and decline.

The bottom line here is that I feel we've done a good job keeping up with input costs, and I expect gross margins will be moving around a bit from quarter-to-quarter due to this lag in material costs hitting cost of goods sold and the wild changes in input costs that we've seen. Our retail operations continue to perform very well.

Like other MH retailers, if they could get more homes, they could sell them. They have done a great job adjusting to the dynamics of the past year, which has been an emphasis on e-leads and phone-ups during the bulk of the year when walk-ins were down.

It's been a consistent story of higher conversion rates, which means people are out to buy not just shop. Traffic and sales continue to follow a seasonal pattern, but at a significantly higher level than in recent years.

Regarding financial services, I want to specifically recognize the outstanding job done by our people at Standard Casualty, who responded remarkably to the February Texas freeze, which was in their customers' time of need. This tremendous commitment had made a huge difference for many impacted homeowners.

Claims from that event exceeded our reinsurance limit of $2 million. Despite this, financial services had a strong quarter and year, with gross profit up 84% and 12%, respectively.

As Paul will explain, the quarterly comparison was to last year's period when we had some CountryPlace mortgage valuation adjustments and loan loss assumption changes, resulting from the late March market disruptions. Regardless of performance in both, lending and insurance was strong.

In the broader housing picture, the homebuilding industry is only touching the level of new unit starts needed to balance household formations, with supply and labor constraints the country's pent-up demand for units from a decade of under building is not yet being worked down.

While we know there will be cycles driven by interest rates and other macroeconomic drivers, there is a tremendous need for more affordable housing. Beyond the past year's challenges and our need to focus on delivering strong results, we stayed focused on the long term as well.

Our strategy of investing in our plants, seeking acquisitions and new growth opportunities and investing in our people was not paused by the pandemic.

As one example, during the quarter, we announced the purchase and development of a new park model facility in Glendale, Arizona, it will increase capacity for park model customers and also increase our HUD capacity because it frees up the second line in our Goodyear plant. That project is on schedule to open later this year.

We're investing in improvements to our plants that will increase productivity and improve the workplace for our coworkers. And we're committing ourselves to training and career programs that will pay off in retention and skills improvement.

These are the fundamentals that will enable Cavco to produce more homes and have a bigger impact on affordable housing. With that, I'll turn it over to Paul to discuss the financial results in more detail..

one, lawyer fees; two, insurance recoveries; and now, this accrual. I also want to remind you that the previous period included $2.1 million of D&O, insurance premium amortization at no expense in the current quarter. Other income in this quarter was $3 million compared to a net expense of $631,000 in the prior quarter.

The current quarter includes unrealized gains of $2.1 million on corporate equity investments compared to unrealized losses of $2.1 million in the prior year quarter. This increase is partially offset by $0.6 million in reductions in interest income or non-cash and commercial loan receivables given low -- and lower interest rates.

Pretax profit was up 118.4% this quarter compared to 29 -- $29.7 million and $13.6 million for the prior year period. The effective income tax rate was 15.2% for the fourth quarter compared to 12% in the same period last year.

The higher effective tax rate in the current year period relates to higher income, partially offset by greater tax benefits and stock option exercises. Net income was up 110% to $25.2 million compared to net income of $12 million in the same quarter of the prior year.

Net income per diluted share this quarter was at $2.71 compared to $1.29 in last year's fourth quarter. Now I'll turn it over to Mark to go through the balance sheet changes..

Thanks, Paul. So comparing the April 3, 2021 balance sheet to the March 28, 2020 balance sheet, the cash balance was at $322.3 million, up from $241.8 million a year earlier.

Increase is primarily due to 4 items, which include net income offset by noncash unrealized gains on equity investments and other noncash items; changes in working capital, including greater accrued expenses and other current liability balances which include higher customer deposits received as a result of higher order rates; principal collection on consumer loans; and then sales of consumer loans greater than loan originations.

These were offset by purchases of property, plant and equipment, including the purchase of the Glendale, Arizona park model facility, higher inventory purchases and repurchases of our common stock. Investments increased from the recovery of the underlying equity markets during the period.

Inventories increased due to rising prices of raw materials used in production. Prepaid and other assets was higher from the assets reported in regards to the loan repurchase option for delinquent loans that have been sold to Ginnie Mae.

While we are not obligated to repurchase these loans, accounting guidance requires us to record an asset and liability for the potential of a repurchase. The balance included increase from additional loans in forbearance, offset by routine amortization of prepaid balances, including the additional D&O premiums.

Long-term consumer loans receivable decreased from principal collection on loans held for investments that were previously securitized. Operating lease right-of-use assets and the related liabilities increased from a 5-year lease renewal of our Goodyear manufacturing facility.

Accrued expenses and other current liabilities increased from deferred payroll tax payments under the CARES Act, higher customer deposits, which have grown with the factory backlogs as well as the delinquent loan repurchase option previously discussed.

Lastly, stockholders' equity was approximately $683.6 million as of April 3, 2021, up $76 million from $607.6 million as of March 28, 2020. And the balance sheet includes a new treasury stock line item, representing the cost of our repurchase Cavco shares during the period. And with that, I'll turn it back to Bill..

Thank you, Mark. I want to follow-up on Paul's comments about the SEC costs and the related accrual. I know that given the very long time the situation has been unfolding, there's likely to be a lot of interest in this.

We'll appreciate that given that the amount is financially immaterial to our overall results and that it pertains to a desired settlement with the SEC, we're not separately identifying the accrual amounts. I also want to clearly say that our decision to accrue does not indicate any change in our view of a possible settlement, which remains uncertain.

I understand this likely raises the question then why did you accrue now? This is a process and one that the SEC controls and drives. As part of their process, we saw fit to formalize the settlement proposal. And from an accounting perspective, this triggered the need for an accrual. You should not interpret this to mean that a settlement is imminent.

I also want to caution that legal fees and potentially other costs are likely to continue. While I recognize this is news for reasons that I hope you'll appreciate, we aren't in a position to say more about it at this time. With that, Grace, let's turn it over for questions..

[Operator Instructions]. Your first question comes from the line of Daniel Moore from CJS..

Just a quick housekeeping to start.

How much revenue and gross margin benefit did you see in the quarter from the additional week kind of year-over-year?.

Is that a number, so that one....

We can certainly estimate that if you had it. And we can get it offline, it's not that difficult to back in queue..

Give me a second. We will come back to it later..

Yes. We'll come back to it, Dan..

Sure. So a lot of detail on the prepared remarks, Bill, greatly appreciate it, a lot of moving parts in the business.

What are your expectations for shipments in fiscal Q1 relative to Q4? And what should we think about the levels of potential shipments as we look out to Q2 and Q3, given this supply chain constraints that are well documented and particularly around PVC and siding and the disruptions from the Gulf, et cetera.

So any commentary on how we should think about the cadence of shipments going forward would be helpful?.

Yes. Well, it will continue to be interesting. I mean the supply situation really has not let up. So we're not really seeing any less supply disruption than we have in previous quarters. So that risk remains kind of unchanged. For the most part, it hasn't caused our plants to shut down. We've had some very isolated situations where we've lost a day or so.

And as we've talked before, that causes inefficiency rather than necessarily shut down or has so far. So anything that we kind of anticipate as kind -- has that risk overhanging it, it continues to be the case. Now what we're going to try to do is and what we've been doing, which is continue to work our capacity utilization up.

What we've seen -- I told you that we're at 75% over the course of the fourth quarter. Our interim goal is to get back to where we were pre-pandemic, which is in the 80% range. And I think that's achievable, that we got to 75% and even spent periods of time in the quarter at 80% despite less production employee hours.

So I feel like we're doing a good job from a throughput perspective from an efficiency perspective. We just have to get the numbers up to that 80%. So I know I'm not giving you anything specific. Demand certainly isn't a question.

The question is, can we get the labor hours up? And can we get -- can we continue to maneuver through the supply issues? So that's kind of how we're looking at it and don't really have a specific projection for you..

Okay. Doesn't sound like you expect daily or weekly production to step back, at least on what you're seeing today materially, it's just a quick function of how quickly we can improve it. Is that a fair assessment, at least? I mean just wanted....

Yes. That's exactly right. I mean, all of our focus in manufacturing is just get as much throughput as we can and hoping that we can turn the tide on this unhealthy backlog build. None of us want it to be that high..

Okay.

Are you seeing incremental demand coming from trading down versus site built, particularly given rising raw material inflation? Any anecdotal or other evidence there?.

Yes, I only have anecdotal and maybe even just what we believe to be happening from a logic perspective. We talked in the past that as much as we're struggling with efficiency and supply, we're more efficient with labor and materials than site builders. So in a way, the playing field for MH just keeps growing upward.

So then -- and then you've got the rapid increase in housing costs that everyone has heard about in this following. So all that indicates that there's got to be some segment that in different times, we'd be looking at site built, but now are kind of in the zone at the higher end of our business. So I believe that's happening.

I don't have a lot of data to point to. But the flip side of that -- either you would have asked us Dan, but the flip side of that is concerned about the fact that the folks at the lower end in normal times would have been qualifying for bidding into a home and MH home, they're kind of getting priced out of the market right now.

So that deficit of supply is just getting worse..

Understood. That's helpful.

And labor availability and absenteeism, are you seeing any improvements as the pandemic recedes or just kind of too early to tell?.

Yes, it's kind of bouncy. Every time we get a little optimistic because we have a good week of net hiring, then we get humbled the next week, I guess. So I think we're heading in the right direction.

I think some of that -- I'm hopeful that in the coming months, some of that's going to just be an improvement on a general economy perspective as far as people going back to work and looking for jobs. In fact, think that some of it's attributable to some of the things we're doing to try to address opportunities for our workplace and our wages.

We're doing a lot of things here that I think are making a difference. So I'm optimistic about getting through that -- the hiring difficulties that we're facing..

Got it. And lastly, and I'll jump back.

But the exciting to kind of hear about or see how the development of the new park model facility takes place, what other geographies that you've got targeted for potential greenfields where maybe you can open a plant and then increase capacity, not only at the new plant, but alleviate a little bit of stress on some existing ones? Or is it -- will you sort of wait and see how this goes first and then go from there?.

Yes. We don't really want to wait and see. I mean, we want to be relatively aggressive about investing because our view, as we've talked in the past, is very confident as far as demand going forward. So we're not sitting on our hands. The challenges with new capacity, obviously, it doesn't happen overnight.

So you've got to have the confidence in demand, which we do, but the challenges are the same challenges that face us in our existing operations.

Can you get the labor? Can you get the supplies in a situation where some supplies are being allocated right now? And the classic challenge in MH also is how are you going to get kind of the shelf space, the access to market because most places are already served.

So we've always said that we've got a real interest in the next frontier for us geographically, which is the Northeast, just geographically. And we're working hard to figure out how we can grow our shipments. So whether that's acquisition or more greenfield, we'll have to see how it unfolds..

And your next question comes from the line of Greg Palm from Craig-Hallum Capital..

I wanted to start off with back to the demand environment.

Curious what trends have been like in April and May? And I guess, any noticeable difference between retail and community channel calendar year-to-date?.

I'll take the second part first. It's kind of a short answer, they're both going strong. I know early on in the fiscal year when the pandemic was getting under way, communities kind of took a step back, kind of more of a wait and see attitude and the street dealer business just took off. I'd say today, both are very strong, hard to separate them.

And what was the first part, the demand as far as regional? Was that what you're asking?.

No, I was just -- for current quarter-to-date, what you're seeing in terms of trends, April, May, whether anything has changed since what you saw in your fiscal Q4?.

Generally, continued to be very strong. One of the things, and this might be a little more information than I need to throw out there that you're interested in. One of the things we've started doing is keeping a really close eye on quotes as a leading indicator of demand. Then generally, I can just tell you, they remain very strong.

The theory being that there should be a correlation between quotes to our manufacturing plants and ultimate orders. And from that perspective, we just don't see any letting up right now. Obviously, the same things would be the turning points, if we see a significant increase in rates that will change the tide.

But right now, there's just no reason not to be pretty optimistic about continued strong demand..

Yes, makes sense. I was a bit surprised that ASPs were flat quarter-over-quarter. I know it's still a big jump on a year-over-year basis. And I think you called out mix shift a bit more towards multi. I don't know if that comment was specific to the year ago period or sequentially.

But I guess, what would be the reason that ASPs won't continue to go up? Is that your expectation as you've continued to take up pricing here in recent months?.

Yes. It's a little different answer for the sequential quarter-to-quarter of the year.

Mark, do you want to answer it?.

Yes. So this is Mark. Yes, we had a comment that you mentioned was related to Q4 over Q4 year-over-year. So sequentially, we did actually see a little bit of a mix shift towards more single section homes. So that was offset by increased prices on kind of the multi-section. So kind of net-net flat like you mentioned..

So excluding any potential mix shift going forward, is it still safe to assume that like on a like-for-like basis home prices are still going up? I mean, I think you've been taking price increases even more recently, correct?.

Yes, that process just continues. Yes. I mean, as Paul talked about the input costs really shot up during the quarter. So we're doing our best to kind of keep up with that. And we tried to explain the dynamic that we see with margins and the fact that there is a lag between the current pricing of input costs and what flows through our cost of goods.

So it's something to keep an eye on, I think, as I said, we're going to probably see some bouncy percent margins..

Yes. And I guess that was going to be my last one because we obviously have the blended rate for the quarter in terms of the gross margin, but you had mentioned that it sounded like it was higher than that at the beginning and lower than that at the end.

Can you at least sort of quantify maybe the gross margin rate exiting the quarter? I don't know if it was lower by 100 basis points or 150 basis points.

And I'm specifically asking about the factory-built side, but I'm not sure if that's what -- if you can quantify that specifically or not?.

I don't think we have the quantification, but just to give a little more background on that, we looked at the rate of materials per floor in October, and there was really a dip between the end of September, and then the dip really started in October and continued all the way through November into most of December.

And so as those costs were purchased as raw materials, those then became cost of sales or expense in primarily January and February, which is why we had that increased margin and in the earlier part of the quarter. Don't have the specific amount of that.

But just in general, the cost per floor was roughly 20% less in those in that October, November period than what we had in other periods, primarily in lumber and OSB..

Next up we have Jay McCanless with Wedbush..

Just to ask one more question on that.

Should we think normally that there's going to be kind of that 2-month lag where you buy raw materials and it takes about 2 months for them to go into a home? Or has that lag shorter right now as you're trying to ramp utilization?.

I think it's a pretty good rule of thumb, to be honest, because you're right, we're trying to ramp utilization, but we're also trying to make sure we get materials. I mean it's not only the price, but it's the physical availability. So we're not trying to run at a very lean inventory right now in this environment.

We're trying to make sure that we've got everything we can get. So I think that that's probably -- I'm looking at Paul.

I think that's probably a pretty good rule of thumb 2-month lag?.

Yes, that makes sense. And like you said, a change in ramping up production, the factories are very keen on making sure they have enough product to continue to build..

Okay. Great. And then I understand that you don't want to comment much on the SEC investigation, but I got a little lost, Bill, when you were discussing why you needed to take the reserve this quarter.

Could you go through that again, please?.

Yes. That's fair enough. I'd love to talk about everything. I don't want to talk about it when we can say it's all wrapped up. Yes, basically, in the process of -- we've said all along, we're hopeful for a settlement, right? And in the process of working with the SEC this past quarter, we kind of formalized a settlement proposal to them.

And when we did that, that made it appropriate from an accounting perspective to book an accrual. And that's kind of it. I mean, that's the news really, so -- I think the difference from the previous quarter was how the discussions going on, but there was really nothing formalized. It had been ratified by our Board. It was similar.

It was just discussions between the junior member at the SEC and our external counsel. So the formalization happened in Q4..

Okay. Great. That makes more sense. And then I guess the other question I had is you talked about low end consumers potentially getting priced out -- low end MH consumers.

And do you guys have any sense of how much of your market? Is it 5% of the TAM, 10%? I mean, how much do you guys think has been priced out on that lower end buyer?.

Yes, it's kind of a tough question because we still have such high demand, right? So we're not seeing the demand impact from it. I'm just kind of reflecting on what's obviously going on in the market and the fact that the country has got this affordable housing issue, I believe that's a low end of the market issue.

And that part of the market, it just got a lot harder by houses. So Jay, I don't really have a quantification of it. Just I think that while we believe that there's a huge general pent-up demand for housing, it's disproportionately growing at that low end..

Our next question comes from the line of Ian Lapey from Gabelli Funds..

Bill, first, congratulations, 11 straight years of growth in revenues and earnings and, obviously, this year during a pandemic, it's very -- love it..

Thanks, Ian. Yes, thank you very much..

A few questions on financial services, if I could.

I guess starting with Standard Chartered, how significant was the excess of claims above the retention limit? And did this event, the Texas freeze, has that resulted in higher pricing, either for your primary insurance or from your reinsurers? And also any impact on demand for insurance?.

Yes. The pricing impact really isn't apparent, if there's going to be one. It kind of happens periodically on both our rates as well as reinsurance rates. So there's no apparent impact from that perspective.

It was an interesting event because it was characterized by a whole lot of -- relative to, for example, a hurricane, a whole lot of smaller dollar number of claims. There were a lot of them. So if they go over the $2 million, and I don't know, I mean I don't think we have any statement about how much over our $2 million it went.

It was the magnitude of some of the name hurricanes that we've had in the past though. I mean, this was a big issue..

Okay. And then on the commercial lending operations. I know initially, this was -- you got into the business to fill a void left as National Lenders exited.

Have large lenders come back to floor plan financing for retailers? And do you still view this as sort of an area of attractive growth, presumably independent retailers will be adding stores, given strong demand?.

Yes. I mean there's availability for floor plan lending out there. We continue to do. You're absolutely right. The initial thrust of that years ago was because so many big lenders exited the market. We're kind of comfortable with how we manage it. And we do think it's important for some of our relationship with independent dealers.

So it's not something we look to necessarily grow aggressively from a profit perspective. We use it as kind of a way to support those independent dealers and the level has been relatively stable over time..

Okay.

And lastly, for CountryPlace, any updates on the chattel lending operations and any expansion there?.

Yes, we still think it's an opportunity. We've seen some success in the market with some securitizations that people have probably heard about, so that's encouraging. And we think we're pretty -- we think we're doing a good job at kind of pricing the risk of chattel lending.

As we talked during the past year, the rates really were pushed down, surprisingly, at least for me, it was surprising that during the pandemic, there was kind of a step change down in rates for chattel lending. But even with that, we're looking at it as something that we might commit more balance sheet to over time..

Next up we have Bill Wolfenden from Cottonwood Investments..

I have a couple of questions, please. You guys announced a share buyback a couple of quarters ago, it looks like you only bought back 6,000 shares. We're getting to -- it looks like over $375 million of cash and investments on the balance sheet.

So could you just discuss your capital allocation priorities looking out over the next few years, please?.

Yes. The small amount of buybacks, I don't -- it's almost regrettable in the quarter just because it kind of wasn't that significant, but we've got going. So we still see that as an important tool to trying to manage the cash balance going forward. As I've said before, we recognize we've got to manage that cash.

And we're quite frankly kind of surprised in the early days of this last fiscal year that we built cash flow. We did just because as we started the year we didn't know what was going to transpire. So taking that a little bit of a pause to see what happened with the pandemic, and we just kind of accelerated the issue.

As far as priorities, we are investing in our plants, and we're investing in some organic growth, as you've seen with Glendale, Arizona facility that we're working on. That cash was -- there was a big use of cash this quarter for that. We are continuing to be in the market for acquisitions and hope that we'll be able to do something there.

I talked -- based on Ian's question, I talked that we're willing to use some capital for chattel lending as long as the risk rewards right for us. So the priorities kind of remain the same, and we know we got to get some cash put to work here..

So based on those comments, you anticipate the buyback potentially picks up then looking forward as we sort of get through the pandemic and potentially the SEC issue? I mean, just seems like you're buying your own shares might be more beneficial than earning zero in cash?.

Yes. I mean, we got the authorization and intend to use it to try to help manage the cash flow. So that still is the case now..

Great. And then just a housekeeping question.

Can you elaborate on exactly what the nonmarketable equity investments entail?.

Yes. So those are our joint venture in retail operations that we partially own..

Okay. Great.

And then has there been any new proposals that we may have missed from the new administration in Washington that could potentially benefit the manufactured housing industry?.

Yes, nothing that I would really say is noteworthy on the call here. No..

And we have a follow-up question from Daniel Moore from CJS..

Bill, just wondering any update at all or color around the CFO search?.

It's ongoing. I wish it was done, but we're doing well kind of holding down the foot. So it's like any recruiting effort, it's kind of ongoing until the day you got it done, and we're not quite there yet. So anxious to get there, though. Thanks for asking..

Thank you. I am showing no further questions at this time. I would like to turn the conference back to Mr. Bill Boor, President and Chief Executive Officer, for any closing remarks..

Thanks, Grace. Just in summary, we continue to operate through some very real challenges and risks, but most notably, the supply and labor that we talked about. In a year with so much to work through, it's beyond gratifying to be able to report the strong financial results.

And as I've said a few times, it's due to a tremendous amount of hard work by our very capable and committed people across the company. So we're all very mindful that there's a lot of work ahead. We want to reduce the backlogs. We want to provide more quality, affordable homes, loans and insurance coverage to the folks out there that we try to serve.

So really appreciate everyone's time today. Thank you for that, and thanks for your continued interest in the company..

Thank you, ladies and gentlemen. This concludes today's conference call. Thank you all for joining. You may all disconnect..